Daily Archives: August 8, 2010

This is just a brief note, late on a Sunday evening, so I’ll get right to the point: I don’t care much for the way the Wall Street Journal is reporting on the Mark Hurd expense-account imbroglio.

What’s bothering me about the WSJ’s coverage isn’t so much what it has published but what it has failed to publish. Specifically I’m confused as to why the WSJ frequently fails to disclose Mark Hurd’s standing as a board member of News Corporation, which happens to own the Wall Street Journal as well as number of other media properties.

In reporting on the alleged improprieties of one of its parent company’s board members, the WSJ owes it to its readers to acknowledge the corporate connection between it and its subject. On rare occasions writers at the Journal make note of Hurd’s significant link to their parent company, but most of the time they seem to omit reference to it.

To me, it seems like a potential conflict of interest that should, at minimum, be acknowledged.

Share this:

Like this:

One of the conspiracy theories making the rounds about Mark Hurd’s forced departure from HP’s mahogany row is that at least some of the company’s board members set him up.

Yes, that seems outlandish, and I don’t put much stock in it. Still, let’s walk through the scenario, if only because it’s a Sunday morning and there’s not much else to do.

Exploring the Conspiracy Theory

According to the conspiracy theorists, a minority of HP board members had become convinced that Hurd had overstayed his welcome. They were concerned that Hurd had done all he could in implementing his unique brand of operational rigor, replete with “labor arbitrage” (that’s a bloodless description of shipping jobs overseas to low-cost jurisdictions), lean command-and-control hierarchies, relentless emphasis on efficiencies and cost cutting, and automation of any and all processes that could benefit from it.

Despite what the gullible business press tells you, Mark Hurd was no innovator. He wasn’t a strategic genius or a visionary. He didn’t really take HP into any new areas during his reign — they already had services before EDS, they already had networking before 3Com, they already had mobile devices before Palm. His proficiency was in making things run leaner and meaner, to the point where the company and its business units became carefully monitored, resource-maximized operations.

Not a Visionary

Hurd isn’t a creative man. He’s not Steve Jobs, looking to redefine product categories with striking new designs and far-reaching market vision. That’s not Hurd’s strength. Instead, his claim to fame was the ability to take charge of an organization and squeeze inefficiencies out of it. His preoccupation was the elimination of waste, which results in reduced operating expenditures, not the creation of new products and revenue streams.

The conspiratorial murmurs suggest that a minority of HP’s board members felt it was time for new leadership, that HP had executives in place who could carry on Hurd’s cost-control disciplines in his absence. What they felt they didn’t have, according to the theory, is a team of executives who could engender meaningful innovation at the company. Under Hurd, HP had become a company whose only innovations came in cost cutting.

Apparently the dissident shareholders didn’t have enough votes to oust Hurd, who was also the company chairman, without creating a catalyzing event, a pretext, for the change. Hence a setup and the scandal you’ve just read about in the news.

Other Factors

Now the conspiracy theory includes other background elements. As I mentioned yesterday, morale at HP, especially in the USA and Europe, is dangerously low. As you can see, Mark Hurd isn’t the most popular man in the world. At a certain point, especially if you have a company in which nobody below the executive level feels much like coming to work, you have a problem. There was also the matter of compensation. Hurd’s contract was coming to an end, and he apparently wanted to be paid like Alex Rodriguez.

Still, in my view, the conspiracy theory doesn’t hold. While I think we have yet to learn the truth about what really transpired between Mark Hurd and the mysterious marketing contractor, I don’t think a faction of HP’s board hatched a plot to fatally embarrass the company’s CEO. Anything could have happened, I suppose, but this scenario seems very unlikely.

The full story has yet to emerge, but I don’t think we’ll discover that a cabal of Hurd’s fellow board members engineered his downfall.